Think Globally, Tax Locally

Most northwesterners believe that governments pay for roadwork from gas tax revenue. And they’re right about the federal and state/provincial level. But they’re wrong about city and county road spending. That comes out of property and sales taxes. Regionwide, we spend several hundred million local, general-fund dollars a year on the infrastructure for cars and trucks. (Read details here.)

A citizen panel in Seattle has studied the city’s roads and bridges and found a maintenance crisis. Some of the bridges are in danger of falling down. They recommend local vehicle charges to pay for repairs, though they grudgingly admit that a property tax may be the only viable option in the short term.

The obstacle they have run into is among the most important but least noted near-term impediment to tax shifting and transportation finance reform in Cascadia.

States and provinces give localities exceedingly few revenue options. So localities, which are perhaps the most prone of any level of government to begin the switch to green fees and taxes, have little authority to do so.

In British Columbia, the Centre for Integral Economics is working with municipalities to pry open their range of choices. (Full disclosure: CIE used to be our organizational affiliate Sightline BC.) And there’s some momentum in Canada toward a transfer of federal hand off of gas tax money to cities: that may help cities balance their budgets but it won’t reap the economic and environmental benefits of tax shifting.

And Sightline is contacted far more often by local elected officials than by their peers in senior levels of government for help crafting tax-shift policies.

So it’s encouraging that Seattle may organize other cities in Washington to collectively pressure the state legislature for more choices. The state should enthusiastically assent. It has nothing to lose and everything to gain from encouraging innovation among local jurisdictions.

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Founded in 1993, Sightline Institute is committed to making the Northwest a global model of sustainability, with strong communities, a green economy, and a healthy environment. We work to promote smart policy ideas and monitor the region's progress towards sustainability.